Consider the following short-run cost curves for a profit-maximizing firm in a perfectly competitive industry.
FIGURE 9-2
-Refer to Figure 9-2.If the market price is $2,the firm will
A) produce zero output.and make zero profit.
B) produce zero output.and suffer a loss equal to its fixed cost.
C) continue operating in the short run and suffer a loss that is less than its fixed cost.
D) produce 300 units and make a loss equal to total variable cost.
E) produce 200 units and make a loss equal to its total fixed cost.
Correct Answer:
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